Simon Murray, Research Analyst at Westpac, notes that Australian dwelling approvals rise 11.7% in November, driven by a jump in Victorian apartment approvals.
“Dwelling approvals continued to surprise to the upside in November, increasing by 11.7% compared to market expectations for a 1.0% decline. October’s result was revised from +0.9% to -0.1%.”
“November’s uplift was driven by a jump in Victorian approvals, up 38% on the back of a 21% rise in October, while the rest of Australia was relatively flat, down 2.0% in the month following October’s 8.3% drop.”
“The increase in Victoria was concentrated in private apartment approvals, in particular the high rise component (four or more storey blocks). However, the high rise series is typically volatile, and November’s surge likely reflects a lumpy project pipeline. This raises the risk of a sharp correction lower in apartment approvals in coming months even though Victoria has been seeing strong population growth. Nationwide, apartment approvals rose 30.6%, mainly due to the aforementioned lift in Victoria but also gains in QLD and WA on a much lower scale.”
“Approvals for detached houses were more modest, down 2% in November and broadly flat on an annual basis, +2.2%yr. By state, Queensland retraced some of the past month gains (-6.7%), WA continued to trend down (-8.7%) while NSW recovered part of October’s drop (+2.6%). Victorian house approvals edged back from a strong increase in October (-1.1%) and SA had a solid month (+4.4%).”
“The value of renovation approvals fell 3.5% following a 15.1% jump in October. The value of non-residential approvals was broadly flat in the month, but is 35.5% higher over the year to November.”
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